The Sunday Times
Scotland must build a supply chain for offshore wind
Grand plans for North Sea farms will require the manufacturing of turbine towers and blades on an epic scale. So where is all this kit going to come from?
Jeremy Grant
Sunday September 15 2024, 12.01am, The Sunday Times
When Kate Forbes, the deputy first minister, launched the Scottish government’s “Green Industrial Strategy” last week, it took place at Flowcopter, a five-year-old Edinburgh firm that makes drones the size of a small car. These “autonomous pick-up trucks in the sky” can fly 100 kilometres out to sea, carrying spare parts for offshore wind farms.
Just the thing for Ossian — planned for 80 kilometres off the Aberdeenshire coast. The wind farm, backed by Marubeni of Japan, Copenhagen Infrastructure Partners and SSE Renewables, is on an epic scale, potentially powering six million homes.
To do this, it will need to install a vast amount of hardware, including up to 265 floating wind turbines, each with three blades attached to a steel tower reaching 400 metres above sea level — taller than the Eiffel Tower. The world’s largest floating wind farm, off Norway, has a mere 11 turbines.
Ossian is one of 20 floating and fixed-bottom wind farms planned for the North Sea under the ScotWind round of seabed leases awarded by Crown Estate Scotland in 2022. Add in other plans and Scotland accounts for 52 per cent of the projects destined for UK waters, making it the biggest pipeline of offshore wind outside China.
So where is all this kit to come from? It can’t be sourced domestically because most of what is needed isn’t made here. Two blade factories in England don’t produce enough to supply what’s needed in Scotland. The only place where steel towers have been made, in Campbeltown, closed in 2020.
Sourcing from overseas won’t work, either. That’s because more countries have been piling into offshore wind, squeezing supply. Last year, there was a 24 per cent increase in new installations, according to the Global Wind Energy Council, with future growth driven by Australia, Japan, Brazil and Poland.
An innovative Scottish scheme to match potential supply-chain projects with offshore wind developers, called the “Strategic Investment Model”, is helping. But the building of a vast domestic supply chain is needed. Trade body RenewableUK reckons Britain could triple its offshore wind manufacturing over ten years by making blades, turbine towers, foundations and cables, at a cost of up to £1.6 billion.
Yet the heavy lifting will be done by Great British Energy, a publicly owned entity presented to parliament a couple of weeks ago by Ed Miliband, the energy secretary. It is to use £8.3 billion of taxpayer funds to work with the private sector to speed up the deployment of green projects.
The strategy unveiled by Forbes made the right noises, recognising “building on our first-mover advantage in floating offshore wind”. The sector will be glad that £500 million allocated by Holyrood in 2023 to develop a supply chain has survived emergency spending cuts.
GB Energy makes sense because it recognises the state’s role in driving investment in critical national energy infrastructure at a time of fractured geopolitics. As Miliband said: “The argument for clean energy that we used to debate 15 years ago was a climate argument. It is as much now an energy security argument.”
He cites the Inflation Reduction Act’s catalytic effect in sucking in private investment in US renewables. The hope is that a partnership between GB Energy and Crown Estate will similarly attract “£30 billion-£60 billion of private investments” in offshore wind. This is a big ask without a sense of GB Energy’s risk appetite, given it will take stakes in projects it owns, manages and operates.
Forbes said last week that she is on a “mission” to attract private finance for renewables to fill the gap left by declining North Sea oil. That mission must be shared with London in a way it wasn’t during the confrontational Tory relationship with Holyrood. Encouragingly, there are now weekly calls between UK energy minister Michael Shanks and his Scottish counterpart.
Yet the North Sea gap remains fraught with risk, fraying nerves in Aberdeen, GB Energy’s likely headquarters. Robert Gordon University’s Energy Transition Institute estimates that 60-70 per cent of supply-chain capabilities in oil and gas are applicable to offshore wind, meaning there is huge overlap and skills transfer between the two workforces.
Potential removal in the upcoming UK budget of the capital allowances that make or break a case for continued investment in North Sea oil, combined with any relaxation in offshore wind targets, could threaten the very workforce needed to build a supply chain, warns Paul de Leeuw, the institute’s director.